Insights // Fall 2021 10
HBK Nonprofit Solutions
Insights // Fall 2021 11
HBK Nonprofit Solutions
statements for calendar-year organizations could not be issued because there was no definitive guidance or mechanism for reporting on their uses of the funds until July 1, 2021. • The new reporting guidance includes hard deadlines for the use of the funds and reporting through both the PRF reporting portal and on the entity’s SEFA. However, entities are reporting expenditures in a manner they are not accustomed to. Audits for a particular year typically cover expenditures made during that year. But entities spending part or all of their funds in the year they receive them will not report on those expenditures until the following year (see chart below). • HHS had indicated the deadlines to report are firm; there are no extensions.
L EG I S L AT I O N
What you should do now: • Start gathering the information you will need, as indicated in the HHS reporting portal, including a wide range of demographic and financial information. • Draft your SEFA and determine if you require a Single Audit. • Document key positions regarding the calculations of lost revenue and qualifications of expenses in relation to PRF compliance requirements. • Engage an independent auditor with the proper training and experience, one who is qualified and practiced at doing a Single Audit. We are here to help. Call us at 724-934-5300; or email me at dmastropietro@hbkcpa.com.
Many healthcare providers have been in limbo relative to reporting their Provider Relief Fund expenditures. Financial statements for calendar-year organizations could not be issued because they had not yet reported on their uses of the funds, as there was no definitive guidance or mechanism for reporting until July 1, 2021.
Payment Received Period (payments exceeding $10,000 in aggregate received)
Deadline to Use Funds
PRF Reporting Portal Time Period
Schedule of Expenditures for Federal Awards (SEFA) Reporting
Did You Receive Provider Relief Funds? A “Single Audit” Might Be Required
Period 1
From April 10 – June 30, 2020
June 30, 2021
July 1 to Sept. 30, 2021
FYEs of June 30, 2021 through June 29, 2022
Period 2
From July 1 – December 31, 2020
Dec. 31, 2021
Jan. 1 to March 31, 2022
FYEs of Dec. 31, 2021 through June 29, 2022
Dominic Mastropietro, III, CPA, MBA
Period 3
From January 1 – June 30, 2021
June 30, 2022
July 1 to Sept. 30, 2022
Guidance will be included in 2022 Compliance Supplement
Period 4
From July 1 – December 31, 2021
Dec. 31, 2022
Jan. 1 to March 31, 2023
Guidance will be included in 2022 Compliance Supplement
HBK PRINCIPAL
T
hrough the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Paycheck Protection Program and Health Care Enhancement Act (PPPCHEA), the
federal government allocated $178 billion in Provider Relief Fund (PRF) payments to support healthcare providers through the COVID-19 pandemic. Because the money comes from the federal government—it is being distributed by the Department of Health and Human Services (HHS)—those accepting the money, including nonprofits, could be subject to Single Audit requirements, as outlined in the regulations at 45 CFR 75 Subpart F. Requirements for a
Single Audit are triggered when an organization expends, in aggregate, $750,000 or more of federal funds in a year.
What you should know about the Single Audit Requirement: • The federal government specifies that independent auditors should be engaged to determine whether the financial statements, including a schedule of expenditures of federal awards (SEFA), are presented fairly. • In conducting a Single Audit, auditors look to ensure the entity complied with the terms and conditions of the federal award as well as test the internal controls of the organization relevant to compliance.
• The auditor you select should be specifically trained for and capable of conducting a Single Audit. Not all auditors or auditing firms perform Single Audits. • The Office of Management and Budget’s (OMB) Compliance Supplement specifies the PRF reporting requirements. • The entity, with assistance from the auditor, will be required to submit the audit through the Federal Audit Clearinghouse. The data will be analyzed to determine whether the money has been used as intended. • Until recently, many healthcare providers were uncertain as to how to report their Provider Relief Fund expenditures. Financial
HBK NONPROFIT SOLUTIONS // AUTHOR PROFILE
Dominic Mastropietro, III, CPA, MBA Principal
D
ominic is a Principal in the Hermitage, Pennsylvania office of HBK CPAs & Consultants. Dominic provides accounting, auditing and tax services to various industries, including manufacturing, insurance and nonprofit organizations, with an extensive background in captive insurance, employee benefit plan and nonprofit organization audits. For more information contact Dominic at 724-981-7550, or by email at dmastropietro@hbkcpa.com.
